Which of the Following Statements Is Not True Relating to a Capitalized

question 42

Multiple Choice

Which of the following statements is not true relating to a capitalized (capital) lease?

• A)A capital lease is handled as if the lessee bought the asset.
• B)The leased asset is in the fixed assets and the related obligation is included in liabilities.
• C)On the balance sheet,the capitalized asset amount will not usually agree with the capitalized liability amount because the liability is reduced by payments,and the asset is reduced by depreciation taken.
• D)Usually,a company depreciates capitalized leases faster than payments are made.
• E)On the balance sheet,the capitalized asset amount will usually be higher than the capitalized liability amount.

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